Review for the Ministry of Transport Te Manatū Waka - Performance Improvement Framework - State Services Commission

 
Review for the Ministry of Transport Te Manatū Waka - Performance Improvement Framework - State Services Commission
Performance Improvement
Framework

Review for the
Ministry of Transport
Te Manatū Waka

January 2018
Review for the Ministry of Transport Te Manatū Waka - Performance Improvement Framework - State Services Commission
Contents
Accepting the Challenge                                                                 3
The Ministry of Transport’s commitment                                                  4
Central Agency support                                                                  9

The Challenge                                                                        10
Four-year Excellence Horizon                                                           11
Performance challenge                                                                  13
What will success look like?                                                           18

Strengths and Opportunities                                                          19
Overview                                                                              20
Strengths and opportunities in detail                                                 22

Appendices                                                                           43
Lead Reviewers’ Acknowledgement                                                       44
About the Ministry of Transport                                                       45
Framework Questions                                                                   46
Ratings Scale                                                                         47
Interviewees                                                                          48

Introducing the Ministry of
Transport’s Lead Reviewers

Dr Paul Reynolds                                                                                Dr Keith Turner
Dr Reynolds currently serves as Deputy Chair of Landcare Research                               Dr Turner is a professional director and is currently Chair of Fisher
Ltd, director of AgResearch Ltd, Chair of the Sir Peter Blake Trust, a                          and Paykel Appliances Ltd and Chair of specialist engineering
trustee of the Eastland Community Trust and Chair of the Our Land                               consultancy Damwatch. He has several Australian directorships
and Water National Science Challenge.                                                           - South Australia Power Networks, NSW TransGrid and Victoria
                                                                                                Power Networks Pty Limited. He has recently completed his term
He was Chief Executive at the Ministry for the Environment (MfE)
                                                                                                as a director of Chorus Limited and has previously served on the
from 2008 to 2015, when he also led the Natural Resources Sector
                                                                                                Board of Spark Infrastructure, an Australian listed company, as
Group of Chief Executives and served as chair of the Leadership
                                                                                                Chair of Emirates Team New Zealand and Deputy Chair of Auckland
Development Centre and the Advisory Board to the Victoria University
                                                                                                International Airport Limited.
of Wellington School of Government. Previous senior public service
roles were at the Ministry of Research, Science and Technology                                  Dr Turner has 40 years’ executive experience in the New Zealand
and the Ministry of Agriculture and Forestry. Dr Reynolds began his                             power industry, including as CEO of Meridian Energy, from its
career as a research scientist at the University of Missouri, then at the                       establishment in 1999 to 2008. He holds a PhD in electrical
Department of Scientific and Industrial Research and HortResearch.                              engineering and is a Distinguished Fellow of the Institute of
He holds a PhD in Biochemistry from the University of Otago.                                    Professional Engineers of New Zealand.

He has been a Lead Reviewer for the PIF Reviews of Ministry for
Pacific Peoples and Crown Law Office and for the PIF Follow-up
Review of the Ministry of Culture and Heritage.

Published January 2018. ISBN 978-0-478-43487-3 (Online) Web address: www.ssc.govt.nz/pif
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Review for the Ministry of Transport Te Manatū Waka - Performance Improvement Framework - State Services Commission
The Performance Improvement Framework (PIF) enables
State Service leaders to identify opportunities for
improvement, building positive outcomes for
New Zealand.

PIF is designed for agencies in the New Zealand State sector.

The PIF Review is a valuable tool that helps leaders drive organisational
change. Change that will improve future agency performance, resulting in better
outcomes for New Zealand.

Independent reviewers lead each PIF Review. They have significant leadership
experience across New Zealand’s public and private sectors. Their fresh
perspective helps to stimulate ‘new thinking’ amongst agency leaders as they
grapple with the critical issues and challenges that lie ahead for their agency.

The review is a future-focused exercise. The reviewers consider the questions:
“What is the contribution New Zealand needs from this agency? What is the
performance challenge to make that contribution over the next four years?”
Taking a four-year horizon encourages medium-term strategic thinking and
helps leaders and agency staff to understand what success would look like.            Peter Hughes
                                                                                      State Services Commissioner
Then, considering current capability to meet future challenges, the reviewers
evaluate the agency’s preparedness for the future and describe its performance
improvement priorities.

Each PIF Review delivers a published report, ensuring transparency and
supporting accountability to New Zealanders.

The PIF Review is a valuable tool that helps
leaders drive organisational change.

                                                           Performance Improvement Framework – Review for the Ministry of Transport   1
Performance Improvement Framework

                      Four-year Excellence Horizon
           What is the agency’s performance improvement challenge?

                                Delivering Government Priorities
                          How well is the agency responding to government priorities?

                                         Delivering Core Business
    In each core business area, how well does the agency deliver value to its customers and New Zealanders?
          In each core business area, how well does the agency demonstrate increased value over time?
                     How well does the agency exercise its stewardship role over regulation?

                                    Organisational Management
                       How well is the agency positioned to deliver now and in the future?

   Leadership and         Delivery for           Relationships              People                Financial and
     Direction          Customers and                                    Development                Resource
                        New Zealanders                                                            Management

  Purpose, Vision       Customers               Engagement with         Leadership               Asset
  and Strategy          Operating Model         Ministers               and Workforce            Management
  Leadership and                                Sector                  Development              Information
                        Collaboration and
  Governance            Partnerships            Contribution            Management               Management
                                                                        of People                Financial
  Values, Behaviour     Experiences of
                                                                        Performance              Management
  and Culture           the public
                                                                        Engagement with          Risk Management
  Review
                                                                        Staff

                                                    Performance Improvement Framework – Review for the Ministry of Transport   2
Accepting the
   Challenge
                                        1
                                         In this section:
   The Ministry of Transport’s commitment
                    Central Agency support

          Performance Improvement Framework – Review for the Ministry of Transport   3
The Ministry
of Transport’s
commitment
Introduction                               Our Performance                            The Ministry also needs to be adaptive
                                                                                      and enabling of change, and lead a
We welcome this review, which is           Challenge                                  collaborative group of government
particularly timely for the Ministry.      The reviewers recognised that the          transport sector agencies.
We want to thank the reviewers for         transport system faces complex
the insights that they have provided,      policy and regulatory demands that
and also thank our stakeholders who        need to be addressed. These include
have supported the review process          the disruption that is on the horizon
and provided their own views on the        from technology, the wider policy
type of Ministry that is needed for the    context across government (including
future.                                    Auckland, climate change, regional
The reviewers largely undertook their      development and housing, and the
work in an iterative process alongside     impact of transport on equitable access
the Ministry’s own organisational          to health, social services and work) and
review process. The Ministry took          more transport specific issues such as
decisions on its organisational review     modal neutrality and the need to focus
in June, and marked the beginning of       on the development of an integrated
wider change when the new Ministry         transport system.
structure came into effect in October      The reviewers articulated what
2017. So while the findings from this      New Zealand needs from the Ministry        This review sets a bold
PIF Review largely reflect the position
prior to the start of our organisational
                                           – leadership in delivering an effective,   challenge. As a
                                           efficient transport system that meets
changes, we are pleased to see that        economic, social, cultural and             Ministry, we are up for
they are well aligned with our own
thinking on how the Ministry needs to
                                           environmental needs now and adapts to      that challenge.
                                           meet changing needs and aspirations.
change and lift its performance over       This means enabling an integrated
the next three to four years.              transport system that supports
This review sets a bold challenge.         New Zealanders to gain equitable
As a Ministry, we are up for that          access to goods, employment and
challenge. We are already underway         services; is cognisant of the potential
through our major organisational           of all modes; is resilient and safe to
change programme that started in           use; minimises the impact on health
October. Our new structure embeds          outcomes and the environment; and
our commitment to build capability and     is well-positioned to take advantage of
capacity in the major areas identified     continuous evolution in transport and
by the reviewers. We are only three        associated technologies.
months into our organisational             The reviewers noted the need for the
transformation and we know where we        Ministry to be articulating credible
need to focus our efforts to make the      scenarios for the future; providing
most important gains. The reviewers’       advice to the Government that brings a
insights have strengthened this focus,     more cohesive and strategic transport
and our new organisational action          perspective to a range of economic
plan will drive the transformation of      and social issues; and developing
our operating model over the next few      policy approaches that are supported
years.                                     by strong data and analytics and
                                           informed by the needs of customers
                                           and transport suppliers.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   4
Responding to                               For example, we have worked closely         We will use our unique position to
                                            with agencies such as Auckland              reach across the State sector and
our performance                             Council, Auckland Transport, the            work on shared outcomes where
challenge                                   New Zealand Transport Agency (NZTA),        transport has a role to play. By June
                                            the State Services Commission (SSC)         2018, we will be ‘around the table’
We welcome the reviewers’ recognition
                                            and the Treasury on the Auckland            for all key cross-government policy
of the need for the Ministry, as
                                            Transport Alignment Project (ATAP),         initiatives that have a transport
leader within the transport system,
                                            and with a wide range of government         component.
to be collaborative and systems-
                                            and non-government agencies on the
focused – seeking to orchestrate the                                                    We will not be able to do this alone.
                                            development of the Intelligent Transport
transport system to achieve optimum                                                     We will need the support of other
                                            Systems Action Plan. Both are examples
performance.                                                                            government departments and transport
                                            of future-focused, system-wide, strategic
                                                                                        Crown entities to allow us to fulfil our
The Ministry’s performance challenge,       policy development, co-created with
                                                                                        unique role in the system.
given its stewardship and leadership        a range of other agencies. We are
roles for the transport system, sits in     committed to applying this approach
four key areas:                             more widely to our work in the future.      Developing a medium-term
                                                                                        strategy
• achieving clarity of purpose
                                            Achieving clarity of                        The reviewers recognised the excellent
• developing a medium-term strategy
  underpinned by strong analytics           purpose                                     work that the Ministry has done on the
                                                                                        longer-term issues and outcomes for
• growing our capability for                We have already made some progress
                                                                                        the transport system. We understand
  collaboration                             clarifying our purpose, vision and
                                                                                        that the challenge is now for us to
• re-booting the organisation.              values through our organisational
                                                                                        better connect that longer-term view
                                            review to support the Ministry’s
This is a bold challenge, but one that                                                  to the more immediate transport policy
                                            leadership role. Over the next 12 to
we readily accept. We recognise that                                                    and operational decisions that need to
                                            18 months, we will embed these as
achieving it will require significant and                                               be made.
                                            a core foundation for the Ministry’s
sustained effort by the Ministry over the   culture, in our business planning, and      To make that connection, by the
next four years and beyond. It will also    in the way we work. For example, we         end of 2018, we will have worked
require the Ministry to develop new and     have started to recruit and assess          collaboratively alongside our
innovative ways of delivering on our        staff performance based on the ability      stakeholders to identify the challenges
core responsibilities, and require us       to understand and contribute to the         that lie ahead for the transport system
to bring new perspectives as we work        purpose and vision, and to exhibit the      and the medium-term choices for the
alongside our key stakeholders in the       Ministry’s values in the way we work.       Government. This work will take a
future.                                                                                 mode-neutral approach. It will provide
                                            A key focus over the next 6 months will
We are up for the challenge, but we are                                                 a clearer understanding of emerging
                                            be for the Ministry to embed its unique
not starting from scratch. The reviewers                                                transport needs and opportunities, and
                                            leadership role in the sector. This will
recognised that some of our work                                                        the contribution each mode can make.
                                            involve us taking a system-wide focus
provides examples of the way that we                                                    It will provide a framework for us to
                                            and a strategic, long-term view, which
want to operate in the future – we need                                                 know whether we are on track towards
                                            only we are in a position to do. We will
to further develop these approaches                                                     our longer-term goals.
                                            lead the collaborative development
and embed them as part of our day-to-       of policy on both investment and            This will allow us to take corrective
day operating model.                        regulatory settings.                        actions where and when necessary,
                                                                                        particularly in relation to investment
                                                                                        settings and regulatory design.

                                                            Performance Improvement Framework – Review for the Ministry of Transport   5
One of the critical strategic levers       Strengthening our analytical capability    The Ministry has increased the
the Government has for shaping the         is critical to developing better           energy and focus we are placing on
transport system over the medium-          foresight and policy. As part of the       stakeholder engagement. We have
term is the Government Policy              organisational review, we have created     created a specific Governance and
Statement on Land Transport (GPS),         a range of new teams focused on            Engagement Group within the Ministry,
which defines how the National Land        improving our analytical and modelling     and will develop a comprehensive
Transport Fund will be invested. We        capabilities. This includes a new          stakeholder engagement strategy
will partner with the Treasury, NZTA,      Regulatory and Data Group and,             by June 2018. We will continue to
KiwiRail and others to develop advice      within that Group, a team specifically     step up our efforts to engage and
to the Minister of Transport on the        focusing on Analytics and Modelling.       collaborate within the Public Service,
GPS, so that it fulfils its potential in   We will also develop a new analytical      with the transport Crown entities, and
addressing the outcomes that we seek       framework that should help improve         with transport system stakeholders.
for the transport system. We expect a      our ability to draw value from data and
                                                                                      We are already deepening our
new GPS to be published in 2018.           develop evidence-based policy. We
                                                                                      engagement with stakeholders,
                                           look to Central Agencies and other
In addition, we are developing                                                        and moving where appropriate to a
                                           government departments to support
governance arrangements and a work                                                    co-creation model. For example, we
                                           this effort by sharing knowledge,
programme to meet our regulatory                                                      have created a leadership forum for
                                           expertise and examples of analytical
stewardship challenge by June 2018.                                                   Transport Sector Leaders, comprising
                                           tools and frameworks used elsewhere
The aim of this work is, in partnership                                               the Chief Executives of all the
                                           in the State sector.
with the transport regulators, to                                                     transport Crown entities and State
deliver a transport regulatory system                                                 Owned Enterprises. We intend to step
that enables innovation, while             Growing our capability for                 up the role of this Group in the future
supporting an effective, safe, and         collaboration                              to take a more central role in shaping
secure transport system that meets                                                    the strategic policy agenda.
                                           To give effect to the Ministry’s system
New Zealand’s needs. It will include:
                                           leadership role we need to move from       We will benefit from Central Agencies’
• looking at the regulatory settings for   consulting on particular policies to       support and knowledge of new
  transport, to ensure that the type of    having a more collaborative culture,       approaches and techniques for
  regulation used is appropriate to the    where we work more in partnership          this type of open and participative
  circumstances                            with stakeholders on critical              approach. Central Agencies have, by
• ensuring that regulators have the        issues. We will need to develop a          the very nature of their roles within
  right tools, resources and capability    sophisticated approach to this as we       the State sector, developed a lot of
  to carry out their roles effectively     have numerous public and private           custom and practice in facilitating
                                           sector stakeholders and a wide range       knowledge-sharing and coordinating
• creating feedback loops in the
                                           of complex policy issues that we need      effort across a range of stakeholders.
  system and responding to emerging
                                           to advance.                                The Ministry will benefit from drawing
  issues in a timely manner so that
                                                                                      on their collective experiences.
  the suite of transport regulation        As noted above, we already have
                                                                                      We also need Central Agencies to
  remains fit for purpose and does         some good examples of collaborative
                                                                                      work closely with us in some policy
  not have unintended consequences,        work that have delivered positive
                                                                                      projects. For example, the Treasury
  and                                      results. We will build off the strong
                                                                                      and SSC have been partners in the
• looking at how our legislation           foundations that these initiatives have
                                                                                      ATAP process, and major projects
  should evolve over time to support       provided.
                                                                                      such as the GPS will benefit from
  emerging technology.                                                                similar levels of Central Agency
                                                                                      involvement.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   6
Re-booting the Ministry                   We have also created a new dedicated
                                          team within the Ministry to focus on
We agree with the reviewers that we       business integrity, continuity, risk
need to reinvigorate the Ministry in      management and performance. We
order to drive it forward to become       want to draw upon the expertise
the high performing organisation that     and knowledge of Central Agencies
we want it to be and that New Zealand     in developing high-performing
needs it to be. This means re-orienting   organisations. For example, we have
the Ministry so we can give full effect   already commenced working with
to our stewardship role, and provide      the Department of the Prime Minister
future-focused, integrated and system-    and Cabinet and the New Zealand
wide advice to Government and             Intelligence Community on improving
deliver increased value over time.        our protective security practices.
We have made good progress                We also want to draw on the SSC’s
down this path of organisational          workforce development work and
transformation. Areas that we will        Central Agencies’ experience around
address over the next four years          four-year planning.
include:                                  In 2019, we will evaluate how far we
• embedding the Ministry’s new            have progressed down the path of our      ...re-orienting the
  culture                                 transformation and to ensure we are       Ministry so we can give
• ensuring our corporate systems
                                          still on-track.
                                                                                    full effect to our
  support a high performing Ministry
                                                                                    stewardship role,
• providing high quality advice that is
  free, frank and fearless                                                          and provide future-
• developing a much more                                                            focused, integrated and
  collaborative working style                                                       system-wide advice
• strengthening the capability of our
  staff.
                                                                                    to Government and
Through our recent transformation, the
                                                                                    deliver increased value
Ministry has already started to look at                                             over time.
its capacity and align its capabilities
with its new way of working.
We are developing our managers
and staff. We want to draw on the
broader skills and experiences in the
State sector and across the transport
system by utilising secondments and
talent exchange arrangements, and we
look to Central Agencies to support
and facilitate this process.

                                                        Performance Improvement Framework – Review for the Ministry of Transport   7
From left to right: Bryn Gandy, Paul Laplanche, Kirstie Hewlett, Robyn Smith, Karen Lyons, Nick Brown and Peter Mersi (Chief Executive and Secretary for Transport)

The way forward
As we said at the beginning of this response, we welcome this thoughtful and
insightful PIF Review.
The PIF Review has helped the Ministry to clarify its performance expectations
and provides a foundation for us to develop our new organisational strategy.
The Ministry’s vision is well aligned with our performance challenge (being
a great collaborator, solving problems and interpreting trends, enabling new
technologies, and taking a whole-of-system approach).
While we are at base camp now, we can see our destination and preferred route
to get there. With the support of our stakeholders we are ready to take the next
step.
By March 2018, we will have developed a plan of action that maps out all of
the work we will need to commence or carry on in order to address the issues
raised by the PIF reviewers and identified through our own organisational
transformation process.

Peter Mersi, Bryn Gandy, Karen Lyons, Kirstie Hewlett, Nick Brown, Paul Laplanche and Robyn Smith
Chief Executive and Senior Leadership Team

                                                                                     Performance Improvement Framework – Review for the Ministry of Transport         8
Central Agency
support

An effective transport system                 on Transport that has evolved into a       • strengthen its analytical capability to
contributes to an economy, environment        continuously researched multi-modal          develop better foresight and policy.
and society that works for New                instrument driving system impacts.           Improving analytical and modelling
Zealanders, now and in the future.                                                         capabilities will be a significant
                                              We agree that the Ministry, in
                                                                                           element of this along with an
The Ministry of Transport (the                responding to the challenges and
                                                                                           analytical framework that supports
Ministry) is the Government’s principal       opportunities the Lead Reviewers have
                                                                                           the Ministry to develop evidence-
transport adviser, leading advice to the      identified, should focus on: achieving
                                                                                           based policy
Government about long-term priorities         clarity of purpose; developing a
and challenges in the transport system,       medium-term strategy underpinned by        • move to a more collaborative culture,
medium term direction, and day-to-            strong analytics; growing its capability     where it works in partnership with
day policy decisions. It assists the          for collaboration and re-booting the         stakeholders on critical issues. This
Government give shape and effect to its       organisation. The Ministry’s recent          will require a more sophisticated
transport policy for New Zealand across       organisational review and changes            approach.
all modes and regions, in collaboration       it has made over the last six months       We have committed to providing that
with other transport sector agencies          have begun to address some of              support and assistance where we are
and stakeholders. It has a central role       these challenges. In implementing          able. The Central Agencies will be
in improving the overall performance          its Commitment the Ministry needs          involved, at a fit-for-purpose level, in
of the transport system, and ensuring         to ensure that the transport sector        supporting policy co-creation. Central
better value from transport system            agencies are joined-up and work            agency support for major projects
investments.                                  collaboratively. This will require the     will continue to be available to the
                                              Ministry to demonstrate a combination      Ministry in helping them to deliver on
This PIF Review report outlines the
                                              of long-term vision, medium-term           their outcomes. We will contribute
key challenges and opportunities for
                                              strategy setting and oversight and         our analytical expertise where we can
the Ministry leadership in a context of
                                              partnership in delivering for improved     make a difference, and will share our
emerging technologies and evolving
                                              outcomes.                                  experience of facilitating knowledge
customer preferences and behaviours.
                                                                                         sharing and coordinating efforts across
This context is challenging and complex       The Ministry has asked for our
                                                                                         a range of stakeholders. When a
in a country with distinct needs and          assistance and support to:
                                                                                         significant shift is required to traditional
opportunities on a region-by-region and
                                              • lead the collaborative development       ways of working, it is important that
city-by-city basis.
                                                of policy on transport system            central government agencies line up to
We concur with the Lead Reviewers’              investment and regulatory settings       deliver the shift.
observations that the Ministry’s future         across government and to work on
                                                                                         We are confident in the Ministry’s future
success will emerge from: policy advice         shared outcomes where transport
                                                                                         and its ability to deliver to its excellence
for the transport sector that is integrated     has a role to play - to do this they
                                                                                         horizon.
with wider government policy; industry-         may need our support to be at the
alignment on the major areas of focus;          right tables
and a Government Policy Statement

Peter Hughes                             Gabriel Makhlouf                      Andrew Kibblewhite
State Services Commissioner              Secretary to the Treasury             Department of the Prime Minister and Cabinet

                                                              Performance Improvement Framework – Review for the Ministry of Transport   9
The Challenge
                           2        In this section:
           Four -year Excellence Horizon
                  Performance challenge
             What will success look like?

     Performance Improvement Framework – Review for the Ministry of Transport   10
Four-year
Excellence Horizon
In undertaking this review the Lead Reviewers considered: “What is the
contribution that New Zealand needs from the Ministry of Transport and,
therefore, what is the performance challenge? If the Ministry meets the
performance challenge, what would success look like in four years?”

Context                                   Technological developments provide
                                          new options to address the challenges
Transport systems are entering a          of funding and pricing to build the
time of disruptive change driven          infrastructure needed and ensure
by, amongst other things, the rapid       equitable access within and across
emergence of new technologies and         generations.
increasing global demands for de-
carbonisation. Industry is engaging       There are increasing pressures
actively with new technologies that       on the country’s existing transport
allow improved and/or innovative          infrastructure arising from population,
service delivery and cost reduction.      tourism and economic growth with
Some consumers are early adopters;        consequential increases in freight.
others will follow as new technologies    Recent major earthquakes and
deliver better travel experiences,        weather events have highlighted
greater access and efficiency,            weaknesses in the resilience of that
                                          infrastructure.
improved safety and cost savings.
                                                                                     Depending on how it is
                                          Safety has been an important driver
Depending on how it is delivered,
transport can be an enabler for, or       for the regulatory model for all forms     delivered, transport can be
impede, economic growth and social        of transport in New Zealand, but too       an enabler for, or impede,
                                          strong a focus on risk minimisation
participation and cohesion. There
                                          may block opportunities for innovation.    economic growth and
are particular transport infrastructure
challenges in New Zealand due             There are also challenges in providing     social participation and
                                          a national regulatory model that
to the country’s geography, small
                                          is flexible enough to allow for the        cohesion.
population for its land mass, as
well as the concentration of around       differing needs of our biggest urban
30% of the population in Auckland         centre and the many smaller regional
and the balance widely dispersed          centres that rely on a network of rural
throughout the rest of the country.       roads to support their communities
Due to geography and history, there is    and ‘tourist highways’ to NZ’s great
a high usage of private road transport    outdoors.
compared to public transport by            This means that models and
New Zealanders. New technologies          approaches to transport policy,
may assist in addressing the              the underpinning regulatory
geographic challenges and have the        model and the performance of the
potential to reduce or, perversely, to    different agencies that comprise the
reinforce New Zealanders’ attachment      government transport sector are all
to private transport options.             under pressure to change.

                                                         Performance Improvement Framework – Review for the Ministry of Transport   11
…within this context                      The newly appointed Secretary
                                          for Transport and Chief Executive
The Ministry of Transport (the            is alive to the challenges and the
Ministry) faces a multitude of            need for change. This is on the
issues at this time (from severely        back of a hugely demanding year
stressed modes to rapidly changing        with significant fall-out from a fraud
technology), without strategy-led,        perpetrated in the organisation as well
clear, well-stated and -communicated      as the consequences of the Kaikōura
conceptual frameworks to:                 earthquake. The earthquake placed
• support the role it needs to play for   new, urgent demands on the work
  New Zealand                             programme of the Ministry and had a
                                          dramatic physical impact as well. The
• guide consistency in its thinking
                                          building the Ministry was in could not
• enable it to assert the leadership
  that the whole system and sector
                                          be re-entered and the organisation        The newly appointed
                                          currently finds itself without much of
  needs and is expecting of the           its day-to-day support infrastructure.    Secretary for Transport
  Ministry.
                                          This PIF Review comes at a time           and Chief Executive is alive
It is struggling to meet immediate
demands, while developing and
                                          when the agency is undertaking a          to the challenges and the
                                          comprehensive and far-reaching
executing on near-term strategy and
                                          transformation in its operating model     need for change.
developing the very long-term view.
                                          without having completely defined its
Consequently, the Ministry is:
                                          conceptual frameworks or achieving
• finding it difficult to effectively     clarity on its objective. The review
  integrate the multitude of              therefore offers an opportunity to
  perspectives that exist across          provide independent input to the
  government                              Secretary for Transport’s strategic
• struggling to decide which tables it    repositioning of the Ministry.
  should be at                            The performance challenge and
• not well-positioned to exercise         success scenario outlined below are
  strong policy leadership as             provided in this context.
  integrated, multi-modal1 system-wide
  analysis is not yet developed.

1       Transport in New Zealand is provided through several different modes, including land-based (road and rail), by air
        and on water. Many transport modes rely on interconnections between these modes to enable people and goods
        and services to complete the required journey. International conventions generally govern the individual modes and
        this is reflected in the regulatory approach to and focus on the different transport modes in New Zealand.

                                                        Performance Improvement Framework – Review for the Ministry of Transport   12
Performance
challenge

Performance                                Performance                                • leading a collaborative group
                                                                                        of government transport sector
challenge - outcomes                       challenge – agency                           agencies, each fulfilling its own role
New Zealanders want an effective,          The Ministry has a vital role to deliver     and supporting the responsibilities
efficient transport system that meets      the transport system that New Zealand        and roles of others.
their economic, social-cultural            needs by:                                  The Ministry’s leadership needs to be
and environmental needs now and                                                       facilitative and integrative – seeking
                                           • articulating credible scenarios for
adapts to meet changing needs                                                         to orchestrate the transport system
                                             the future that enable others to
and aspirations; that demands a                                                       to achieve optimum performance. It is
                                             develop their understanding and
step-change. It means an integrated                                                   about synthesis, strategy and policy
                                             engage in the discussion about
transport system that:                                                                settings, not ‘control’. The transport
                                             transport challenges, options and
                                                                                      system is characterised by a very
• provides the platforms and                 choices for New Zealand, then
                                                                                      large number of players, with a variety
  processes enabling New Zealanders          synthesising policy and guidance
                                                                                      of ownership structures and decision
  to gain equitable access to goods,         from those discussions
                                                                                      rights. Many parts of the system
  employment and services                  • providing advice to the Government       operate in a commercial construct and
• optimises the potential of all modes       that brings a more cohesive and          some decision rights rest with another
  and increases utilisation of the           strategic transport perspective to       layer of elected government.
  transport system                           a range of economic and social
                                             issues, such as urban development        The Ministry’s performance challenge
• is resilient
                                             and regional development,                in terms of its transport system
• is safe for customers2 to use,                                                      stewardship and leadership roles sits
                                             social cohesion and access to
  delivering them seamless journeys                                                   in four key areas:
                                             public services, tourism, and
• takes advantage of technology as it        the environmental objectives for         • achieving clarity of purpose
  becomes available                          New Zealand
                                                                                      • developing a medium-term strategy
• anticipates disruptive change and        • developing policy approaches,              underpinned by strong analytics
  makes the most of it.                      supported by strong data and
                                                                                      • embracing the ethos of, and
                                             analytics and informed by the
                                                                                        the growing the capability for,
                                             needs of customers and transport
                                                                                        collaboration
                                             suppliers, that enable trade-offs
                                             between modes to be identified,          • re-booting the organisation
                                             with the positive and negative
                                             consequences clearly articulated
                                           • supporting a regulatory framework
                                             that anticipates future needs, is
                                             adaptive and enabling of change,
                                             can be used, where appropriate,
                                             as a lever to drive incentives and is
                                             efficient and effective recognising
                                             the capabilities of the different
                                             government entities operating in the
                                             sector

2       Customers of the transport system include, as appropriate, passengers, drivers, cyclists, motorcyclists, pedestrians,
        mariners and pilots, as well as individuals and firms who wish to send goods to another location.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   13
Achieving clarity of                        Developing a medium-                       This would provide a sound foundation
purpose                                     term strategy underpinned                  for the leadership role it has to play

The transport system, across the
                                            by strong analytics                        across the transport system. It is
                                                                                       hard to imagine that leadership being
board, is seeking clarity of purpose        The Ministry is widely recognised for      established without such analysis.
from the Ministry. It wishes to see this    forward thinking in the 40-year horizon
expressed in its performance, in the        and now needs to mature an integrated      The Ministry is not starting from
actions the Ministry is taking and in       medium-term (five-year) strategy, from     scratch. It needs to evolve and
the behaviours it is exhibiting. These      which actionable objectives can be         integrate existing models and work,
should all reflect an organisation that     determined and against which it can        together with its partners, to aggregate
is leading the system, not acting as a      be held accountable. This demands          and assimilate the wide range of data
player in it that leads from time to time   a much stronger assessment of              that it currently collects or has access
when pushed to do so.                       transport as a system, incorporating       to. In this way the system moves to a
                                            modal interaction, modal transfers         situation in which data is warehoused
The Ministry has undertaken                                                            and, as far as possible, there is open
                                            and modal performance with a
some work as part of the recent                                                        access to it.
                                            much more balanced emphasis on
Organisational Review to re-state its
                                            rail, sea, air and road. This implies
purpose and now needs to involve and
                                            a deep understanding of the users          Embracing collaboration
engage key partners and stakeholders
                                            and the actual and potential usages        The Ministry will not be able to deliver
in the transport system and across
                                            of transport and of what may unlock        on its purpose or a medium-term
government to complete this process.
                                            economic and social value.                 strategy without taking a collaborative
The needs and aspirations of end
customers of the transport system must      Without being prescriptive, we are         approach to its work. Purpose needs
be central to this work.                    of the view that this means working        to be embraced system-wide. The real
                                            towards the creation of a system-wide      success of a medium-term strategy
In this way understanding and support                                                  comes from its being embraced by
                                            simulation model, or group of models,
will develop amongst the key actors of                                                 others. It is not possible to imagine
                                            to drive analysis on, for example:
their respective roles, responsibilities                                               a comprehensive analytical platform
and accountabilities and the                • resilience                               without others in the sector being
behaviours that are associated              • pricing options                          engaged in that work, especially the
with them.                                                                             regulating agencies.
                                            • revenue forecasting
Importantly, in establishing its purpose,   • policy choices for new technologies      The Ministry will need to build enduring
the Ministry needs to be able to                                                       relationships with its partners and
                                            • national value maximisation
articulate the impacts and outcomes it                                                 stakeholders, maturing its consultation
is seeking to achieve.                      • access policy and trade-offs
                                                                                       model to enable two-way flows of
                                            • potential value capture                  engagement, debate and sector
                                            • the needs of the customers who use       participation. It must bring the needs of
                                              the transport system.                    end users into that engagement model.
                                            This sort of multi-modal simulation
                                            approach will allow the Ministry to
                                            produce compelling and authoritative
                                            options analysis and provide policy
                                            choices that are quantified and relevant
                                            to the total transport system.

                                                           Performance Improvement Framework – Review for the Ministry of Transport   14
True collaboration is relationship-        Re-booting the Ministry                     These, together with other drivers, are
driven and requires the participants to                                                conspiring to require a change in the
variously give up elements of control or   Any organisation is an amalgam of           way the Ministry does business.
decision rights in order to achieve buy-   the circumstances and demands that
                                           have driven it both in the past and         To step up to the new demands,
in and results. The sort of leadership
                                           are influencing it in the present. This     the Ministry has to lift the fitness-
we are suggesting the Ministry
                                           is no different for the Ministry. The       for-purpose of many of its internal
embraces – a facilitative, orchestrating
                                           organisation’s professional services        corporate processes. It cannot and
style – cannot be achieved without
                                           matrix approach over recent years has       will not perform adequately under
genuine collaboration.
                                           driven a responsiveness and project         the current corporate systems and
The complex nature of the issues           focus that is the envy of many. But,        processes. It must also drive a
confronting the sector cannot be           this has required compromise in other       significant culture change towards a
solved by one part alone. It demands       aspects of the Ministry’s business. It      more purpose-driven, collaborative,
genuine co-production approaches           has led to:                                 influential, public service style.
with data, capability, and capacity
                                           • breadth rather than depth and             In driving this shift, the Ministry must
drawn from the whole as well as a
                                             sector specialisation in its skill base   be cognisant of its role across the
willingness to explore and synthesise
                                                                                       sector. It will need to bring partners
differing views, knowledge and             • a focus on specific projects and
                                                                                       and stakeholders along with it,
experience.                                  government priorities
                                                                                       not only seeking their input but
The Ministry is not beginning from         • less emphasis on the Ministry’s           communicating and testing ideas
a standing start if it embraces this         stewardship responsibilities to           with them throughout the policy
performance challenge. There are             provide medium-term strategy and          development process. This will
very well-regarded examples of               policy advice.                            require a shift in approach to sector
collaboration and co-production in         There are complex policy and                governance driven much more by
the present environment. The best          regulatory demands, which the               sector impact and the needs of end
of these is the way in which the           Ministry must address:                      users, than simple compliance.
Ministry, when asked, stepped up and       • significant disruption on the horizon,    Achieving all of this will require a
led jointly, with Auckland Council,          especially in technology                  transition plan that is owned and
the Auckland Transport Alignment
                                           • a wider policy context across             driven by the Secretary for Transport
Project (ATAP)3. It has an industry-
                                             government, including climate             to ensure that the performance
respected model from which to
                                             change, regional development and          expectations are demonstrated to all.
mature this approach, develop it into a
                                             equitable access to work and social
standardised methodology and apply
                                             services
it in the other areas of its business.
                                           • system drivers that are not just
                                             limited to the efficiency of individual
                                             modes but includes system
                                             efficiency
                                           • Auckland
                                           • population growth.

3      The Auckland Transport Alignment Project (ATAP) set out an agreed strategic approach for the development of
       Auckland’s transport system over the next 30 years, as well as an indicative package that illustrates the type
       and quantum of investment likely to be required to deliver this strategic approach. The indicative package included
       all operational and capital expenditure by NZTA, Auckland Transport, and KiwiRail in Auckland over the next 10
       years and is intended to guide the development of statutory transport planning and funding documents.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   15
Implementation                              We have talked much about the              …activating medium-term
The prescription for the four-year
                                            Ministry as an ‘orchestrator’ of           thinking and connecting it
excellence horizon outlined above is a
                                            the system when we describe its            to outcomes
                                            leadership opportunity. An effective
demanding one, for which we make no         system orchestrator:                       The Ministry has, in the Government
apologies, as we have high ambition                                                    Policy Statement on Land Transport4,
for the Ministry of Transport. It is        • is proactive, as a consequence of        a tool that it can use to connect
important, at this juncture, to record        thinking in the longer term              its medium-term thinking, as this is
that the Secretary for Transport and        • understands the levers it has to pull    progressed, to outcomes. Through
many in the Ministry are very aware of        as well as those that are pulled by      the current reorganisation the Ministry
the challenge they face, with strong,         others                                   is putting more resource into this
well-considered, deliberate change          • navigates multiple authorising           area and seeing it as an ongoing
already underway.                             environments - operating by              programme of work, rather than a
                                              influence, not by edict                  project to be delivered once every
The Ministry is in the middle of a
                                                                                       three years.
significant reorganisation and re-          • has the trust and respect of all
orientation, seeking to move away             players                                  This is an important step, but we
from the professional services model        • co-produces with system players          think that there is more to do. The
of recent times and to enable and             rather than consulting after the         opportunity is to imagine a future in
support it leadership for the transport       event                                    which there is a statement of priorities
system. It is considering its future                                                   across the whole transport system
                                            • effectively prioritises and is focused
role, the capabilities it needs to keep                                                (as the Government Policy Statement
                                              on results
and those it needs to grow. As noted                                                   on Land Transport currently sets out
above, as part of this reorganisation       • holds itself and the system to           funding priorities largely for road
the Ministry’s staff has worked               account.                                 safety policing, State highways, local
together to articulate a vision, an         How then does the Ministry become          roads and public transport) and to
aspirational purpose and three values       this orchestrator and implement            start thinking and working in that
to drive the organisation forward. This     the four-year excellence horizon           way. In the short-term this could yield
thinking and discussion will serve          prescription outlined above? We think      more insightful policy advice in the
them well for a broader discussion          the way to achieve this is to focus on     road transport mode. In the longer
with sector partners.                       three key actions. These are:              term, as technological innovation
                                                                                       and disruption continues apace, it
The Secretary for Transport is              • activating medium-term thinking and
                                                                                       could enable the Ministry to provide
leading the change and is working             connecting it to outcomes
                                                                                       informed proactive advice across
effectively with staff to bring it about.   • leading collaborative approaches to      all modes.
He is making difficult leadership calls       strategy and policy development
and thinking strategically about the
                                            • using analytics as a tool for
support systems and processes that
                                              orchestration.
need to be put in place to enable the
organisation.

4       The Government Policy Statement on Land Transport sets out the Government’s priorities for expenditure from the
        National Land Transport Fund over the next 10 years. It is updated every three years.

                                                           Performance Improvement Framework – Review for the Ministry of Transport   16
…leading collaborative                      …using analytics as a tool
approaches to strategy and                  for orchestration
policy development
                                            To lead the transport system as an
Throughout this report we make much         orchestrator requires an organisation
of the need for collaboration and we        to develop a whole range of soft
think that the best way forward is for      skills. These soft skills need to be
the Ministry to start practising it in      underpinned by good data, robust
what it does. If someone is hatching        analytics and clarity of synthesis. In
an idea on their own, the question          the prescription, we make much of the
to put to staff is: “Why are you doing      need for an integrated, multi-modal
that alone?”. The culture of the            modelling system. To get started on
organisation needs to shift to be one       this journey, analytics has to be the
in which collaboration is the norm.         first cab off the rank.
The Ministry has made a good start          The Ministry has access to rich
in this area with its involvement in        data sets, as do other agencies in
ATAP. This marked a shift in approach,      the system. Much could be done to
with the Ministry asked to lead, with       improve access and management.
Auckland Council, a process involving       These improvements can come from
Auckland Transport, the New Zealand         continuing to grow and upskill the
Transport Agency (NZTA), State              analytical capacity of an already
Services Commission (SSC) and the           numerate Ministry as well as from
Treasury to agree principles to guide       modernising the data management
transport investment in Auckland and        systems and moving much more to an
to develop a programme of work.             approach of open access (when this
Those involved saw this as a good,          is appropriate).
robust and constructive process.
                                            Alongside this work with existing
If the Ministry brings this collaborative   data sets, the Ministry must start to
ethos to its total policy work              define the future data needs of the
programme the quality of its work           sector. This will come in part from
will continue to rise, there will be        consideration of the significance for
increased alignment across the              transport policy of ongoing innovation
system over time, the operational           and disruption. It will also require
capacity of the Ministry will increase      a broader analysis of transport as
and skillsets resident in individual        a system, where the system as a
agencies will be leveraged across the       whole is an enabler in economic,
whole system. An obvious next place         environmental and social policy
for this approach to be used is in          contexts.
medium-term strategy development for
the whole transport system.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   17
What will success
look like?

Here we outline some of the shifts           The Ministry will be boldly leading        The Ministry will have a reputation
that will be visible both within the         challenging policy discussions, for        for free, frank and fearless advice in
Ministry and across the sector it            example on full network pricing in a       the face of strong, robust (and larger)
leads, as it meets the performance           post-excise tax world with universal       agencies and industry players. Its
challenge. This is not a ‘list’ of things    transport system access charging.          systems, processes and approach to
that must be done rather it is a picture                                                managing risk will be the exemplar for
                                             Strong leadership results in a Ministry
describing the attributes of success                                                    a small Public Service agency.
                                             culture that is Invested, Bold and
that will be apparent to all.
                                             Collaborative and delivers on the          End users will experience a transport
There will be a single unifying              Ministry’s purpose. It will have wide      system that delivers connected
‘statement of purpose’ driving the           networks of excellence, including          journeys that serves their needs.
Ministry and the sector to medium-           partnerships with universities both at
term outcomes. The Ministry and its          home and abroad. These will drive
sector agencies will be very clear           well-defined future-thinking projects
about, and deliver on, their collective      delivered together with stakeholders,
and individual responsibilities and          targeted at system performance and
roles and agreed impacts and                 technology innovation.
objectives.
                                             The staff of the Ministry will each have
A clearly established approach               ‘line of sight’ to the purpose and key
through ‘data – analytics – insights –       impacts that the Ministry is seeking in
system models – policy – action’ will        its work. They will be well supported
characterise the work of the Ministry        by the organisation’s systems and
and its collaborations.                      approaches to staff accountability and
                                             staff development that make doing          There will be a single
The Ministry’s 5-year strategy, and
the resulting policy advice for the
                                             their job closer to ‘frictionless’.        unifying ‘statement
transport system, will be more broadly       There will be widespread interchange       of purpose’ driving
integrated with wider government             of and collaboration between, staff
policy, for example, with climate            across the system (including the           the Ministry and the
change policy and land use policy.           private sector), leveraging its total      sector to medium- term
The Ministry will have achieved
                                             thinking capacity with operational
                                             knowledge. This will have built the        outcomes.
industry alignment on the major areas
                                             Ministry’s credibility as the sector
of focus for the next five-year period
                                             leader.
and the Government Policy Statement
on Land Transport will have evolved
into a continuously researched multi-
                                                                                        End users will
modal system instrument driving                                                         experience a transport
impact.
                                                                                        system that delivers
The Ministry will be the thought
leader on the broad front of technology
                                                                                        connected journeys that
affecting the transport system with this                                                serve their needs.
thinking, oriented towards ‘opportunity’
and linked to consideration of the
policy challenges created.

Dr Paul Reynolds             Dr Keith Turner
Lead Reviewer		              Lead Reviewer

                                                            Performance Improvement Framework – Review for the Ministry of Transport   18
Strengths and
                                           3
Opportunities
 This PIF Review was undertaken in July 2017. The ratings and commentary
   in the following sections reflect the Lead Reviewers’ findings at that time.

                                                         In this section:
                                              Overview
                    Strengths and opportunities in detail

                          Performance Improvement Framework – Review for the Ministry of Transport   19
Overview

Delivering Government Priorities                                                                         Rating

Auckland

Transport for the regions

Transport and technology

Supporting the export economy

Multi-modal transport

Safety

Delivering Core Business

                                                                              Rating                     Rating
                                                                         (Value to customers         (Increased value
                                                                          & New Zealanders)             over time)

Stewardship of the transport system

Investment

Research and statistics

Improving Crown entity performance

Regulatory stewardship

                                                           Needing                                               Not able
         Strong                 Well-placed                                            Weak
                                                           development                                           to rate

The ratings descriptions can be found in the appendices.
                                                       Performance Improvement Framework – Review for the Ministry of Transport   20
Organisational Management

      Leadership and Direction                                                                           Rating

Purpose, Vision and Strategy

Leadership and Governance

Values, Behaviour and Culture

Review

      Delivery for Customers and New Zealanders

Customers

Operating Model

Collaboration and Partnership

Experiences of the Public

      Relationships

Engagement with Ministers

Sector Contribution

      People Development

Leadership and Workforce Development

Management of People Performance

Engagement with Staff

      Financial and Resource Management

Asset Management

Information Management

Financial Management

Risk Management

                                                           Needing                                               Not able
      Strong                    Well-placed                                          Weak
                                                           development                                           to rate

The ratings descriptions can be found in the appendices.
                                                       Performance Improvement Framework – Review for the Ministry of Transport   21
Strengths and
opportunities in detail

The performance                              The Follow-up Review was scheduled
                                             just under a year after the full
story so far                                 review. The Lead Reviewer noted
The Ministry commissioned a PIF              the Ministry’s progress on key areas
Review in mid-2013 and in 2014               identified in its agency response from
requested a PIF Follow-up Review             2013 and reiterated the message that
(Follow-up Review).                          the changes underway would take
                                             years to fully complete and would
The PIF Review 2013 identified               need steady and persistent attention.
that the Ministry was for the most
part responding well to government           In July 2016, Peter Mersi was
priorities but needed to improve its         appointed Secretary for Transport
performance in most core business            and Chief Executive of the Ministry.
areas. Its delivery was seen to              He commissioned this PIF Review for
be stronger in “focused policy               mid-2017 alongside the organisational
programmes for which it had relatively       change he is leading, to assist in
high control”. Weaker delivery was           confirming the right areas of focus to
identified in “topics that spread across     give effect to that change.
the transport sector for which the
Ministry had influence rather than
control”5.
The PIF Review 2013 noted that the
Ministry had invested in organisational
development over a number of
years and improvements were
acknowledged. The Lead Reviewers
confirmed that the Ministry needed
to continue this organisational
development while also improving
its strategic focus, leadership and
influence across the transport sector.
This required the Ministry to continue
to lift its policy capabilities, strategic
and long-term policy thinking and
investing in stakeholder relationships.
The PIF Review 2013 suggested the
Ministry needed to go harder and
faster to meet its goals.

5       Quotes in this paragraph are from PIF Follow-up Review 2014, Introduction, p4

                                                           Performance Improvement Framework – Review for the Ministry of Transport   22
Delivering Government Priorities

This section focuses on the Ministry’s response to, and delivery on, the
Government’s priorities for the Ministry. While the Lead Reviewers consider
retrospective and current performance, their findings and ratings take into
account the scope and scale of the challenge to deliver on the Government’s
priorities over the next four years.

Government Priority 1: Auckland

Rating

The Government’s priorities for            The ATAP work was a long time coming         Future focus for: Auckland
transport for Auckland have been           but, as is covered in the Four-year
to agree with Auckland Council a           Excellence Horizon, it is a good case        Collaboration with others to create
clear direction for the development of     study of how the Ministry can work           better transport outcomes in Auckland
Auckland’s transport system over the       effectively with stakeholders on difficult   will continue to be the Ministry’s
next 30 years and to make progress         policy issues. It should replicate           greatest challenge in the years ahead.
on The Government’s priorities for         this approach with stakeholders in           To deliver on this priority at the next
transport for Auckland have been           Auckland and elsewhere.                      level will require resource prioritisation
to agree with Auckland Council a                                                        as well as multi-modal policy analysis
                                           The challenge for the Ministry with          that meets Auckland’s future needs.
clear direction for the development of
                                           ATAP is to take it to the point where        This will enable the Ministry to
Auckland’s transport system over the
                                           it yields actual results. Whilst the         provide proactive and relevant advice.
next 30 years and to make progress
                                           principles are now agreed and a              Establishing a multi-modal policy and
onimplementing agreed priority
                                           programme of work defined, the               analytical framework, well-supported by
projects. The Ministry has responded to
                                           phasing of the programme is not yet          data, forms a core part of the four-year
these priorities by:
                                           settled.                                     performance challenge for the Ministry.
• leading jointly with Auckland Council
                                           There is a sense amongst key Auckland        The Ministry as a whole will need
  a successful collaborative effort -
                                           stakeholders that the Ministry has           to continue to devote resource to
  ATAP - involving Auckland Transport,
                                           insufficient operational understanding       increasing its knowledge of Auckland
  the Treasury, NZTA and SSC.
                                           and needs to draw on the operational         transport issues and develop the
  ATAP published its Recommended
                                           experience of others to enhance its          capability and capacity to contribute
  Strategic Approach to the
                                           advice on difficult transport policy         effectively at the level and pace
  development of Auckland’s transport
                                           issues.                                      compelled by the city’s growth. It does
  system in September 2016; this was
  supplemented by an update this year.                                                  not have an option to take its own time
  The Ministry credits the concentrated                                                 or it will quickly lose relevance.
  efforts of its Auckland-based staff in
  making this progress.
• progressing the City Rail Link. A
  Heads of Agreement between the
  Government and Auckland Council
  was published in September
  2016. This sets out in-principle
  commitments by the two parties and
  contains broad funding, governance
  and risk management arrangements.

                                                          Performance Improvement Framework – Review for the Ministry of Transport   23
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